Marchex
Summary
2 This presentation contains forward-looking statements that involve substantial risks and uncertainties.
All statements, other than statements of historical facts, included in this presentation regarding our strategy, future operations, future financial position, future revenues, other financial guidance, acquisitions, projected costs, prospects, plans and objectives of management are forward-looking statements. In addition, there are certain risks and uncertainties relating to our announced spin-off
transaction which contemplates a separation of our mobile and call advertising business and our domain and advertising marketplace business, including, but not limited to, the impact and possible disruption to our operations, the timing and certainty of completing the transaction, the high costs in connection with the spin-off which we would not be able to recoup if the spin-off is not consummated, the expectation that the spin-off will be tax-free, revenue and growth expectations for the two independent companies following the spin-off, unanticipated developments that may delay or negatively impact the spin-off, and the ability of each business to operate as an independent entity upon completion of the spin-off. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our most recent periodic report and registration statement filed with the
Securities and Exchange Commission. All of the information provided in this presentation is as of WRGD\¶VGDWHDQGZHXQGHUWDNHQRGXW\WRXSGDWHWKHLQIRUPDWLRQSURYLGHGKHUHLQ
3
Marchex ± The Biggest Mobile Advertising
&RPSDQ\0RVW3HRSOH'RQ¶W.QRZ
Businesses spend billions to generate phone calls ±
more dollars are shifting to mobile
National and local advertisers across rich
vertical categories
Advertiser
Diversity
Proprietary Call Analytics and advertising platform
drive insights and performance
Proprietary
Technology
Large Market
Opportunity
Significant
Mobile
Reach
Mobile drives our growth and opportunity
Performance-based advertising model in mobile, Pay For Call,
with a run-rate approaching $120MM on an annualized basis*
Business
Scale
4
Marchex is a Mobile Advertising Company
Focused on Calls
=
5
Businesses Need Calls and Spend Billions to
Get Them
Source:
1 BIA/Kelsey, June 2012. 2 Google Mobile Data.
3 Over half of this is currently in offline spend, such as Yellow Pages and print. 4 Forrester Research, 2011. $43.6 $24.7 $0 $15 $30 $45 $60 $75 A nnua l S pend in $ B 3
National Spend Local Spend
National and local businesses are spending $68 Billion annually on Calls1 from potential customers ± from online and offline channels
65
%
Higher conversion rates - up to 10x greater than clicks
More valuable customers - people often want to talk to someone before they buy high-value or complex products
Human connection - 77% of consumers who abandoned an online purchase did so because of the inability to speak with someone4
of businesses value calls most over other advertising outcomes.2 Why?
6
Mobile Ad Spend is Expected to Grow +300% to
$11 Billion in 2016 from 2012 as Advertiser Spend
Follows Consumer Media Time
0 5 10 15 20 25 30 35 40 45 50
Print Radio TV Internet Mobile
Time Spent Ad Spend
% of T ota l Me di a Cons um pti on T im e or A dv erti s ing S pe nd ing
% of Time Spent in Media vs. % of Advertising Spending, USA 2011
Note: *Internet (excl. mobile) advertising reached $30B in USA in 2011 per IAB.
Mobile advertising reached $1.6B per IAB in 2011. Print includes newspaper and magazine. Source: Time spent and ad spend share data eMarketer.
Mobile Forecast: eMarketer. US Mobile Ad Spending Soars Past Expectations. 2012 mobile ad spend forecast is $2.6B per eMarketer.
7% 25% 15% 11% 43% 42% 26% 22% 10% 1%
7 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2010 2011 2012 2013 2014 2015 2016 M on thl y C al ls in M
Calls from mobile search
Consumers Call Businesses from Mobile Searches
More than Desktop and that Number is Growing
Calls from desktop search Calls from mobile search
Source: BIA/Kelsey, June 2012.
* Data from 2011 advertisers. Calls from Desktop search were measured with call tracking numbers.
Calls from Mobile Searches Growing 256% from 2012 to 2016
Average Call Mix to U.S. Businesses (# per location per month)*
76% (35 Calls)
8
And Calls are the Highest Converting Advertising
Outcome for Many Businesses
Print, Radio, TV
Sub. or Cost per Thousand
Views (CPM)
< 1
% Business Model Estimated Conversion* Browse Transact Advertising Medium Funnel CPM< 1
% Cost-per-Click (CPC)<5
%Marchex Pay For Call
(PFC)
20
%+
Display
Search
Call
9
Marchex Solves Three Big Mobile Advertiser
Challenges
Volume
Mobile is fragmented ±
advertisers need many
publishers to drive scale
Quality
Many clicks or calls on
a mobile device are
accidental or spam
Performance
Understanding and
measuring results from
calls is critical to driving
high return on
10
Marchex Addresses Mobile Advertising with Two
Products that Drive and Measure Sales through
Phone Calls
Marchex Call Analytics (MCA)
Digital Call Marketplace (DCM)
Mobile ad network that delivers phone calls to businesses on a Pay For Call basis. MCA provides analysis of the results.
Technology platform that measures and analyzes phone calls.
11
Marchex has Significant Mobile Reach Generated
Through a Broad Range of Mobile Publisher
Sources
+100 sources in the Marchex Digital Call Marketplace, so advertisers can reach mobile consumers
12
Cost Effective Customer Acquisition in Mobile
Advertising Requires Measurement and Intelligence
Chart below represents a breakdown of call types from a sample set of mobile search advertising driven phone calls*.
22
%
Potential new
customer
53
%
Existing
customers
25
%
Spam &
misdials
Blocked by Marchex Call Technology before the advertiser receives itShift ad spend to sources that drive more new customers Identified through Marchex Call Analytics and carefully routed to advertisers Quality Calls
13
0DUFKH[¶V Technology Targets In-Market
Consumers, Filters Callers for Quality, Measures
and Analyzes Outcomes, and Leverages Insights to
Improve Performance
3. Call Intelligence 2. Connecting and Filtering Calls
1. Before The Call
Call Filtering for Quality Calls Reporting & Insights Ad Serving &
Targeting Call Routing
14
Investment in Call Analytics Provides Actionable
Insights to Drive Performance
We leverage our proprietary Call Analytics to
measure and analyze all actions on the call
Automatically recognize key phrases in conversations
Dynamically improve business and operational
performance based on this data
± Top competitors mentioned
± Top features mentioned
± Top objections
Optimize advertising campaigns in real time
± Demographics
± Keywords
15
The Result is Increased Call Volume from Mobile
Consumers and a Higher Return on Investment
16
Our Products Provide Mobile Advertising Solutions for
National & Local Businesses in Dozens of Categories
Auto Cable & Satellite Education Health
Home Services Insurance
Local (SMB)
Real Estate
